Carlyle sees improving exit environment as quality assets attract buyers

Carlyle believes the private equity exit market is becoming increasingly supportive for high-quality assets, with the firm’s leadership pointing to stronger deal activity and improving capital markets as drivers of increased distributions to investors, according to a report by Bloomberg.

Speaking following Carlyle’s second-quarter results, chief financial officer Justin Plouffe said the market remains receptive to well-performing businesses despite continued concerns over valuation gaps between buyers and sellers.

“The market is open if you have good companies and you know how to find the right buyer,” Plouffe said, noting that Carlyle has been executing exits through both trade sales and initial public offerings.

Over the past 12 months, Carlyle’s US buyout platform has distributed 23% of its fair market value to investors, around double the industry average, according to the firm. Recent realisations have included exits across sectors and geographies, including Japan and the US real estate market.

An improvement in exit conditions has become a key theme across the private equity industry, as sponsors seek to accelerate distributions after several years of subdued dealmaking caused by higher interest rates and more challenging financing markets.

Plouffe also highlighted Carlyle’s growing focus on private credit, saying default rates across the firm’s credit portfolio remain low despite a more complex economic backdrop. He said portfolio companies have continued to perform well, while credit spreads remain relatively tight outside the software sector.

The executive also pointed to Carlyle’s recently launched aerospace, defence and industrials investment platform, which completed its first acquisition last month with the purchase of Secturion Systems. The dedicated strategy builds on the firm’s longstanding investment activity across the sector and reflects its increasing focus on national security and critical infrastructure opportunities.

Addressing Carlyle’s broader growth strategy, Plouffe reiterated that the firm remains committed to expanding organically rather than pursuing acquisitions of other asset managers.